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In collaboration with the Korean government, the Bank of Korea has been participating in the establishment of major policies regarding international financial institutions, and has overall responsibility for cooperation with international financial organizations through exchanges and financial transactions. The Bank of Korea is also actively involved in exchanges and cooperative activities with international central bank cooperative bodies as well as other central banks worldwide, endeavoring to come up with effective policy responses to changes in the financial environment such as the integration of financial markets and globalization. Since the 1997 foreign currency crisis, the Bank of Korea, together with the Korean government, has exerted active efforts internationally to ensure that Korea's position is reflected and to share information on the issues of globalization, reforms of international financial organizations, restructuring of unsustainable sovereign debts, the development and implementation of international codes and standards, choice of appropriate exchange rate regime, combating the financing of terrorism and anti-money laundering measures.

Financial Cooperation with International Financial Institutions

The Bank of Korea aims to achieve full reflection of Korea's positions on major policy issues, by participating in various conferences such as annual meetings held by international financial organizations. It is also responsible for negotiations with such organizations, and invests, contributes and participates in other financial transactions with them. Article 85 of the The Bank of Korea Act stipulates that the Bank of Korea shall represent the Korean government in dealing with international institutions. Based on this law and other related regulations, the Governor of the Bank of Korea represents Korea in the Bank for International Settlements meetings as a Governor and in other international financial meetings as an Alternate Governor.

In addition, the Bank of Korea serves as a deposit point for such international financial institution's assets in Korean Won and other foreign currencies. The Bank of Korea maintains current deposit or call deposit accounts of these organizations, and holds securities acquired by them in Korea.

International Monetary Fund

Korea joined the IMF on August 26, 1955, as the 58th country to enter the Fund, with the aim of procuring funds necessary for its economic development. Upon its accession, Korea's quota in the IMF was SDR 12.5 million, only 0.14% of the total. As Korea's importance in the global community has increased through its economic development, however, by end-July 2017, its quota had increased to SDR 8,582.7 million (1.81% of the total, 16th among all members).

Due to its weak economic condition, for a considerable period of time since its IMF accession in 1955, Korea had been able to avail itself of the Transitional Agreements (Article XIV of the Articles of Agreement), which allow restrictions on payments and transfers for current international transactions. In the mid-1980s, however, when Korea's balance of payments position improved, it eased some foreign exchange regulations related to external transactions. From November 1, 1988, Korea became subject to Article VIII, which prohibits discriminatory or multilateral currency agreements and also prohibits foreign exchange regulation on current international transactions.

In the late-1980s, Korea was then acknowledged for the soundness of its balance of payments and external reserve conditions, as its balance of payments had recorded continual surpluses. In March 1987, Korea was included on the IMF's financial transaction counterparty list. Since then it has been delisted a few times, but has now remained solidly on the list since March 2002.

Korea and the IMF concluded their first stand-by agreement (an agreement through which a country can receive a loan from the IMF on the condition that it comply with policy requirements and implement related programs) in 1965, under which Korea could receive SDR 9.3 million to maintain FX rate stability and make-up for its balance of payments deficits. After that, Korea obtained loans on sixteen occasions, with a total value of U$1.68 billion, until 1987. As its balance of payments improved from 1987, this whole amount had been repaid by 1988. However, when Korea faced financial crisis in late-1997, it signed another stand-by agreement with the IMF, this time worth SDR 15.5 billion. Korea subsequently withdrew SDR 14.41 billion in all, and had repaid the entire amount by August 2001.

Since joining the IMF, Korea has received technical assistance several times in various areas. The technical assistance it has received most recently has addressed the following issues: harmonious operation of monetary and FX policy (1999), methods of statistical measurement and accounting of derivatives (2000), implications of the adoption of financial futures on the FX market and methods of response (2000), foreign reserve risk management (2003), measurement of the appropriate FX rate level (2003), and money market development (2007).

Korea also provides various kinds of resources to IMF, as one of the leading emerging markets on the verge of becoming an industrialized country. The Bank of Korea is one of 38 members that have signed New Arrangements to Borrow with the IMF, by which Korea has promised to provide a credit line worth SDR 3,340 million should the international financial system be threatened by a financial crisis of an IMF member.

The Bank of Korea has also provides SDR 1,000 million for the Fund's Poverty Reduction and Growth Trust (PRGT), created to facilitate economic growth and to reduce poverty in poor countries. The Bank of Korea has contributed a further SDR 10 million for the PRGF-HIPC Trust Fund, established by the IMF, to contribute to the Fund's and the World Bank's efforts aimed at reducing the external debts of Heavily Indebted Poor Countries (HIPCs), and has supported the Pacific Financial Technical Assistance Centre (FTAC), which conducts technical assistance related to finance and economy for Pacific islands, with an amount of U$ 0.45 million.

In accordance with Article IV of the Articles of Agreement, IMF conducts Article IV Consultations with Korea regularly. The Bank of Korea participates in this consultation, and discusses with the IMF mission team Korea' macroeconomic and financial market developments and prospects, and the BOK's implementation of monetary policy.

After the Asian economic crisis of 1997, the IMF launched its Financial Sector Assessment Program in May 1999, in order to strengthen members' resilience against financial crises through determining the soundness, vulnerabilities and risks of their financial institutions and financial markets and helping them build sound financial systems. Korea participates in this program, consulting with the IMF on its monetary policies, statistics disclosure and payment and settlement system. The IMF has acknowledged Korea's high level of transparency and stability in these areas, which are the responsibilities of the Bank of Korea.

In collaboration with the government, the Bank of Korea represents Korea in various meetings held by the International Monetary Fund and presents Korea's position there. These meetings include the IMF/World Bank Annual Meetings, IMFC meetings held in the spring and autumn. In addition to participating in these official meetings, the Bank of Korea delegations also meet with international financial experts during the periods of these meetings. Through such activities, the Bank of Korea promotes economic diplomacy by making known the current status of the Korean economy and its monetary policies.

The Bank of Korea handles money transactions with the IMF on behalf of the country. After Korea became a member of the IMF in 1955, the Korean government began directly investing (including contributions) in international financial organizations including the IMF. Since revision of the "Act on Joining International Financial Organizations" on November 16, 1971, however, the responsibility for carrying out capital transactions with such organizations has belonged to the Bank of Korea.

World Bank Group

Korea is a member of all organizations that make up the World Bank Group, including the IBRD, IDA, IFC, MIGA and ICSID. On behalf of the Korean government, the Bank of Korea makes payments to these organizations and participates in various financial transactions with them.

From 1962, a few years after Korea became a member of the World Bank Group, it tapped the capital of the International Development Association(IDA), which provides long-term loans at zero interest. From 1968 it also utilized capital of the IBRD, a commercial-based financial institution. In building its key national industries, Korea took full advantage of capital provided by the World Bank Group. As its economic power grew, Korea graduated from the IDA program for the poorest countries in 1974, and later stopped being a beneficiary of financial support from the IBRD in 1995.

In particular, Korea has been actively participating in various World Bank-led development programs for developing countries since the end of the 1970s, when it ceased being a program beneficiary. From the fifth replenishment of IDA capital in 1979, Korea became a donor, contributing to the raising of concessional funds to support developing countries. Korea joined the Consultative Groups on developing countries from 1987 and the syndicate loan project in 1990. From 1993, Korea also started to give to the World Bank's Consultant Trust Fund.

Regional Development Cooperative Bodies

Korea is a member of several financial organizations serving to promote regional development, including the ADB, AIIB, AfDB / AfDF, EBRD and IDB Group(IDB, IIC, MIF). Korea, currently the eighth-ranked stakeholder in the ADB, is a member of the board of directors and has a considerable influence on the ADB policy. Korea hosted the 37th ADB Annual Meeting in Jeju Island in 2004, 34 years after the third Annual Meeting was held in Seoul in 1970. In 2015, Korea joined the AIIB, an international organization established by China, as a founding member, and it is expected to play an important role within the organization in the future by securing the fifth largest share among the participating countries. Korea also held its second annual AIIB Annual Meeting in Jeju Island in 2017.

The Bank of Korea is also serving as a member of the AfDB/F, EBRD and the IDB Group regional development institutions from outside of Asia, in order to participate in the loan business of these institutions and to strengthen cooperation with their other members. The Bank of Korea contributes technology support funds to these regional development institutions.

Cooperation with Central Bank Cooperative Bodies

The financial environment has been dramatically changed as financial markets around the world have integrated rapidly with the financial innovation and globalization taking place since the mid-1980s. To pursue domestic financial market stability and to implement effective monetary policies, the Bank of Korea has made great efforts to cooperate with international central bank cooperative bodies and other nations' central banks. After becoming a member of SEANZA in 1966, the Bank of Korea joined SEACEN in 1990, EMEAP in 1991 and the BIS in 1997. In these groups, the Bank of Korea works on maintaining close relationships with fellow member banks and on establishing an effective international cooperative structure for discussing current financial issues.

Bank for International Settlements (BIS)

The Bank for International Settlements is the most representative cooperative body among central banks to date, and it is well known to the public through the term "BIS Capital Requirements" that is used to assess the soundness of private commercial banks.

The BIS was established in January 1930 based on the Hague Agreement for dealing with the issue of the reparation payments imposed on Germany after the end of World War I. Its head office is situated in Basel, Switzerland, and 60 central banks from around the world are actively involved as its members. Initially, the role of the BIS was to acquire reparation payments from Germany, and to process capital settlements among countries and overall work related to the distribution of reparation payments. However, the BIS now focuses mostly on its function as a cooperative body of central banks that provides a forum for discussing current issues related to global finance.

The Bank of Korea had participated in the activities of the BIS partially as an observer from 1975 and became a member in January 1997. At that time, it contributed approximately 36.6 million US Dollars and had 3,000 shares allotted to it. It acquired 211 additional shares in 2005, by contributing 4.1 million US Dollars. As of July 2017, the Bank of Korea holds 0.58% of total BIS shares. The Bank of Korea is an active participant in Bimonthly meetings hosted by the BIS as well as in other meetings such as Annual General Meeting, Global Economy Meeting, Meeting of Governors, Meeting of Governors from emerging market economies and Meeting of Asian Consultative Council. Furthermore, The Bank of Korea also takes an active part in the committees including Committee on Payments and Market Infrastructures, Committee on the Global Financial System, Markets Committee and Basel Committee on Banking Supervision.

Executives's Meeting of East Asia & Pacific Central Banks (EMEAP)

EMEAP is a cooperative organization of central banks and monetary authorities in the East Asia and Pacific region that has been very active recently. EMEAP was established in January 1991 to enable central banks within the region to jointly search for policy measures to assist them in smoothly adapting to the rapidly changing global economy and financial market in the 1990s. There are 11 members--the central banks of Korea, Japan, China, Australia, New Zealand, Hong Kong, Singapore, Thailand, Malaysia, Indonesia and the Philippines.

EMEAP's activities consist of regular Governors' Meetings, Deputies' Meetings and meetings offour Working Groups. In particular, the Working Groups focus on the main areas of interest to central banks: Financial Markets, Banking Supervision, Payment and Settlement Systems,and Information Technology. Working-level experts from member banks participate in the Working Groups to conduct research by sector and to consult on policies.

As a founding member, the Bank of Korea participates in various activities conducted through EMEAP and has a successful track record of actively organizing many conferences. In addition, since 2000 the Bank of Korea has hosted the Governors’ Meeting twice, Deputies’ Meeting four times. In addition, the Bank of Korea has organized Meetings for the Working Groups on Financial Markets twice, Banking Supervision four times, Payment and Settlements three times, and IT three times.

South East Asian Central Banks (SEACEN)

SEACEN is a cooperative body of central banks in the South East Asian region, established in February 1966 to develop experts through training and research on areas of common interest and to enable member banks to exchange information and opinions. As of the end of Aug. 2017, there are 20 members, - the central banks of Thailand, Malaysia, Philippines, Singapore, Sri Lanka, Indonesia, Nepal, Myanmar, Korea, Taipei, Mongolia, Brunei Darussalem, Fiji, Cambodia, Papua New Guinea, and Vietnam, China, Lao PDR, India, and Hong Kong.

The Bank of Korea became the organization's 9th member in January 1990, upon approval of the 9th SEACEN Governors' Conference. The Bank of Korea hosted SEACEN Governors' Conferences in 1993 and 1999, and 2012.

SEACEN established the SEACEN Research and Training Centre (SEACEN Centre) in 1972, to facilitate member cooperation in research and training areas. The Centre conducts research on areas of common interest and hosts trainings, seminars and workshops for member bank employees with cooperation from international financial organizations such as the IMF, central banks of industrialized countries including the FRB, and member banks. The Bank of Korea has attended the Meeting of the SEACEN Board of Governors and The SEACEN Executive Committee Meeting every year. It is also actively participating in the research and training activities of the SEACEN Centre, and had hosted a total of 28 training courses, seminars and workshops as of the end of 2016.

South East Asia, New Zealand and Australia (SEANZA)

SEANZA (South East Asia, New Zealand and Australia) was established in 1957 by central banks in the Asian and Pacific region. SEANZA aims to train experts who will help their central banks more smoothly carry out their roles, which have grown in the process of the economic development of regional countries. Although membership had increased from the five original members to 20 as of the end of November 2002, SEANZA has not grown so much relatively, as other cooperative bodies have been formed within the region and have been very active in their work. Various SEANZA meetings, including its Governors' Meeting, are held every two years.

The Bank of Korea joined SEANZA in 1966 and hosted the 12th Governors' Meeting in Seoul in October 1977 and the 12th SEANZA Central Banking Course from September to November 1978.

Cooperating with International Consultative Bodies

Since the financial crisis that hit emerging markets at the end of the 1990s, a consensus has been formed in the international community that the international financial system needs to be strengthened in order to maximize the benefits of globalization and financial market opening, and to minimize the harmful side effects stemming from rapid capital movements. Furthermore, as the economic importance of emerging market countries has grown, there has been a recognition that advanced countries, emerging market economies and International Financial Institutions need to forge joint responses to efficiently handle issues related to reforming the international financial system. As a result, various consultative bodies, such as the G-20, the Financial Stability Board, ASEAN+3 and the Manila Framework Group, have been newly established. The Bank of Korea participates in meetings of these bodies, together with the Korean government, to share Korea's experiences in overcoming crisis with other countries, and to consult on policy measures. The Bank of Korea is also striving to have Korea's position reflected as much as possible in reforming of the international financial system.

Group of 20(G-20)

The G-20 (Group of Twenty) is a representative international forum composed of industrialized countries and major emerging market economies, created with the report of the Finance Ministers of the Group of Seven on "Strengthening the International Financial Architecture" in September 1999. Together with the G-7 countries, * G-20 participants include 12 emerging market economies ** as well as international financial institutions such as the EU, IMF and World Bank.

* U.S., Japan, Germany, U.K., France, Italy, Canada

** Korea, China, India and Indonesia (Asia); Argentina, Brazil and Mexico (South America); Russia, Turkey and Australia (Europe and Oceania); The Republic of South Africa and Saudi Arabia (Africa and the Mid-East Area)

Discussions in G-20 meetings have centered around schemes for involving private sector creditors in resolving financial crises, ways to minimize the side effects of globalization and share its benefits among developed and developing countries, among different income classes, and ways to improve the transparency of policies and statistics in each country.

Through G-20 meetings, the Bank of Korea together with the Korean government participates in the global discussions on reforming the international financial system, introducing Korea's experiences in economic development and the overcoming of financial crisis.

ASEAN+3

ASEAN+3 is a regional consultative forum suggested by China and established in December 1998 upon agreement of Korea, Japan and China with ASEAN, for the purpose of strengthening mutual cooperation within the region on financial issues and enhancing regional abilities to cope with crisis. The 13 members include Korea, China, Japan and the ASEAN countries. *

In May 2000, ASEAN+3 adopted the Chiang Mai Initiative for concluding currency swap agreements among member countries to prevent financial crises. Since 2002, the members have focused on research and discussion for the Asian Bond Markets Initiative (ABMI), in recognition of the importance of fostering bond markets in the region to attract the enormous levels of foreign reserve held by Asian countries.

Meanwhile, in March 2010, the ASEAN+3 converted the existing CMI bilateral currency swap agreements to a multilateral currency swap agreement, called the Chiang Mai Initiative Multilateralization, in an effort to strengthen the agreement’s legal enforceability, to better prevent regional financial crises, and to facilitate more effective and systematic provision of US dollar liquidity in any event of crisis. The total size of the CMIM was increased to 240 billion dollars after revision of the agreements with effect from July 2014. Korea’s contribution and maximum arrangement amounts stand at 38.4 billion dollars each.

Other International Cooperation Activities

In addition to the areas of international cooperation already mentioned, the Bank of Korea makes a variety of other efforts to strengthen the foundation for its cooperation with other central banks and the international financial sector.

First, in order to strengthen its relationships with other central banks through the sharing of policy experiences and staff exchanges, the Bank of Korea has been holding an annual Central Banking Seminar since 1989, in which central bankers from around the world - from advanced countries including the US, UK and Germany, from emerging markets, and from transitional economies - give presentations on and discuss issues of mutual interest and other policy matters.

Furthermore, the Bank of Korea has continuously engaged in exchanges with the Bank of Japan and the People's Bank of China, to facilitate cooperation regarding major issues of the future and to consolidate economic cooperation in the North East Asian region, whose influence on the global economy is growing rapidly.

With Korea taking on a more significant role in the global economy, the Bank of Korea has seen increased demand from developing countries for the sharing of its policy experiences. Accordingly, since 2013 the Bank of Korea has made overall revisions to its training program and has been expanding its technical assistance projects. The Central Banking Study Program, which had been provided annually for central bankers from developing countries and transitional economies, has now been expanded to four to six times a year. Each program is devoted to a single subject, such as monetary policy, financial stability, and payment and settlement. The Bank of Korea also conducts the Study Visit Program throughout the year for foreign central bankers and government officials on the subjects they request.

As a member of the Korean government delegation, the Bank of Korea participates in various economic conferences, such as those held by the OECD. The Bank of Korea also takes an active part in annual meetings with international credit rating agencies, including S&P, Moody's, and Fitch.